Research: Cloud ROI Calculations

Jonathan Feldman02/29/12

The Kung Fu Panda Phenomenon

While there's an air of inevitability around cloud computing, the ROI calculation has stayed in flux. A lot depends on whether we're talking SaaS, PaaS or IaaS; some are easier to wrap your arms around than others. Because of SaaS's very granular cost methodology, it's actually pretty straightforward to calculate investment and who benefits, and thus peg return on investment. For example, especially for commoditized enterprise applications like email, it's fairly trivial to figure out how much personnel, storage, servers, software and licenses cost to come up with a per-seat price for in-house email. Then you can compare apples to apples.

Not so with platform and infrastructure as a service. They certainly have a leg up on conventional networks in terms of cost granularity and transparency. After all, you know exactly what something costs when you run it for an hour. Easy, right? Except now you’ve got to compare it to in-house infrastructure, and that's where things get complicated, because we tend not to have a good handle on those costs. If you throw private clouds in the mix--and you should, because they’re the future--comparisons get even more difficult, because now you have to compare the cost of doing things the conventional way (for argument's sake, straight virtualization with SANs for most infrastructure needs) versus the cost of reinventing your staff and building a private cloud versus the ongoing costs of public cloud. It's easy if you’re a startup building a greenfield IT infrastructure from scratch, but much more complicated for an established enterprise.

The 374 respondents to our latest InformationWeek Cloud ROI Survey are using more public cloud services across the board compared with the last time we ran this poll, in April 2010. But that's not to say we have more cost clarity. (R3890312)

Survey Name InformationWeek 2012 Cloud ROI SurveySurvey Date November 2011Region North AmericaNumber of Respondents 374Purpose To determine the extent of cloud computing ROI analysis in the enterprise.